NEW YORK, Jan. 8 /PRNewswire-FirstCall/ -- The McGraw-Hill Companies (NYSE:MHP) today announced that it restructured a limited number of business operations in the fourth quarter of 2007 to fortify the Corporation's long-term growth prospects.
"The McGraw-Hill Companies remains well-positioned to capitalize on the long-term trends driving global economic growth, and we have taken steps to streamline our operations, lower our costs and strengthen our ability to capitalize on key market opportunities," said Harold McGraw III, chairman, president and chief executive officer of The McGraw-Hill Companies. "Today's growing, knowledge-based global economy has three critical needs -- the need for knowledge, the need for capital and the need for information transparency -- and these actions will enhance our ability to more efficiently serve our markets."
In the fourth quarter of 2007, the Corporation incurred a restructuring charge of $43.7 million, pre-tax, consisting mostly of employee severance costs related to a workforce reduction of approximately 600 positions across the Corporation. This reduction represents approximately three percent of the Corporation's global workforce. The total restructuring charge after tax is $27.3 million, or $0.08 per diluted share of fourth quarter 2007 earnings.
"Reducing staff is never an easy decision, but we believe the steps we have taken will strengthen our organization, enhance our ability to serve our customers and maximize shareholder value," said Mr. McGraw.
McGraw-Hill Education accounts for $16.3 million, pre-tax, of the restructuring charge. The Higher Education, Professional and International Group has taken steps to consolidate certain sales, editorial, marketing and administrative functions, primarily in our international locations, to better address new and existing revenue streams for textbooks, facilitate its strategic shift toward increased investments in digital and custom products, and enable greater efficiencies. The School Education Group also is making a strategic shift toward more digital products, while taking steps to centralize certain management functions and to better leverage outsourcing opportunities.
The Financial Services segment accounts for $18.8 million, pre-tax, of the restructuring charge. In this segment, the reduction was driven by the current business environment, as well as the consolidation of several support functions across Standard & Poor's global operations. The segment's restructuring actions affected both Standard & Poor's ratings and non-ratings businesses.
The Information & Media segment accounts for $6.7 million, pre-tax, of the restructuring charge. Restructuring activities in the segment's Business-to-Business Group -- which includes BusinessWeek, J.D. Power and Associates, Platts, McGraw-Hill Construction and AVIATION WEEK -- are related primarily to the reallocation of certain resources to support continued digital-evolution and productivity initiatives.
Restructuring of Corporate activities contributed $1.9 million, pre-tax, to the total charge and includes the consolidation of certain information technology functions and processes.
"The Corporation's diverse portfolio of industry-leading products and services has positioned us well for consistent long-term growth, and these actions will strengthen our pursuit of that goal," said Mr. McGraw.
The following table summarizes the Corporation's restructuring activities:
2007 Restructuring Summary
(in thousands, except for positions)
# of Restructuring
McGraw-Hill Education 304 $ 16,348
Financial Services 172 18,824
Information & Media 114 6,717
General Corporate 21 1,860
Total Company 611 $ 43,749
About The McGraw-Hill Companies:
Founded in 1888, The McGraw-Hill Companies is a leading global information services provider meeting worldwide needs in the financial services, education and business information markets through leading brands such as Standard & Poor's, McGraw-Hill Education, BusinessWeek and J.D. Power and Associates. The Corporation has more than 280 offices in 40 countries. Sales in 2006 were $6.3 billion. Additional information is available at http://www.mcgraw-hill.com.
Release issued: January 8, 2008
Contacts for The McGraw-Hill Companies:
Media Relations Contacts:
Steven H. Weiss
Vice President, Corporate Communications
(212) 512-2247 (office)
(917) 699-9389 (mobile)
Senior Director, Corporate Communications
(212) 512-4145 (office)
(201) 725-6133 (mobile)
Investor Relations Contact:
Donald S. Rubin
Senior Vice President, Investor Relations
(212) 512-4321 (office)
(212) 512-3840 (fax)
Source: The McGraw-Hill Companies